Pusch View Golf: "In For a Penny. In For a Pound."

In for a penny. In for a pound.” 

The expression "In for a penny, In for a pound" means that if you have already committed to doing something, you might as well go all the way and fully commit to it, rather than holding back. That is exactly what the Oro Valley Town Council did last week.

Council approves "Hole 7" bridge replacement...“

Faced with a staff created "emergency," last week the council approved a bridge that will cost  $390,000 for the Pusch Ridge 9-hole golf course. This is the same course they narrowly (4-3) voted to keep operating in February.  As we reported last week, the "emergency" was created by town staff's failure to personally inspect the facility before the council decision to keep the course open. It was a complete mess-up on the part of Town Manager Wilkins and his staff. 

Council rejected staff’s solution

The approval of the bridge replacement is a rejection of the staff’s less costly recommendation in two respects. First, the staff had recommended that the bridge be removed and a walk around through the wash and up the hills be implemented. In addition, the staff wanted to also replace some irrigation piping in doing this. However, the Council approved replacing the bridge. There will be no replacement of irrigation.

Second, staff had recommended that the funds for this project be taken from the general fund of the town. However, the council approved taking the money from the "community center" fund, which has separate sales tax funding. Town staff projects that the balance of the community center fund will be $1 million at the end of the fiscal year after this expenditure.

Staff insisted. If you want this bridge you must replace it... not repair it.

The reason the council approved replacing the bridge is that there is no way for town staff to determine what it would cost to repair the bridge. This is because the “bargain" that the town got when it purchased the golf courses in 2016 didn't come with any documentation on the construction of that bridge, or any other bridge on that course, or the irrigation that exists on the course today. So there was no way for staff to determine if the supports would work with a repaired bridge. 

Staff rejected the recommendations of residents who spoke at the meeting. According to staff, none of these considered the fully installed cost or the strength of the supports.

$390,000 in the "blink of an eye" won't come so easy in the future....

The town has been spending a tremendous amount of money on parks. It has been flush with cash since it bonded $25 million in funds for parks and received tens of millions of federal dollars for other uses. Those days are past. The 2025 budget will show some of those leftover monies but the majority of town funding will have to come from ongoing revenue sources. And we expect budgets will get tighter as time goes on.

- - -

Bits and Pieces

Council directs staff to spend ARPA restricted funds on existing projects….Violates ARPA spending rules?

This past Wednesday, the Oro Valley Town Council voted (6-1) to fund 2023 budgeted projects with $5.4 million in restricted ARPA funds. Staff had provided the council with a list of eligible projects. Council did not choose which projects to fund. Rather, they are leaving it up to town staff to select the funded projects. 

Essentially, this directive by council adds to town cash reserves. The $5.4 million in ARPA funds replaces $5.4. in town funds that would have been spent on the budgeted projects. Increasing reserves of a town is an explicitly forbidden use of the ARPA funds.

Vistoso Trails Nature Preserve Master Plan community engagement 

"The Town of Oro Valley is holding an open house on Wednesday, Jan. 25 for the community to review the Vistoso Trails Nature Preserve Master Plan Community Input Report. The open house, which will be

held in the newly restored Garage at Steam Pump Ranch (10901 N. Oracle Road) from 10 a.m. to 6 p.m., will allow community members to drop in at their convenience to review the data gathered from previous public engagement meetings, provide feedback and learn about the Master Planning process." (Source: Town of Oro Valley Media Release) You can review the report in advance of the meeting. "Those who cannot attend the Jan. 25 open house, can review the report and email comments to project's manager.

Head-on Crash on Oracle in December was caused by a reckless driver

There was lots of talk about the horrific accident at Oracle and Pusch View Lane last month. Here's the facts: "On the morning of December 16, an attempt to locate was dispatched, referencing a reckless driver in a black Chevy Silverado heading south on Oracle Road from Rancho Vistoso Boulevard at over 90 mph. An officer was on a traffic stop on Orace Road just north of La Reserve Drive when he observed the suspect vehicle drive by at an extremely high rate of speed, weaving through traffic and then passing vehicles on the shoulder of Oracle Road. The speeding truck then crossed into the northbound lanes of traffic while still heading south where a head-on collision occurred in front of the Target shopping plaza with a maroon Chevy Silverado driven by the victim. The drivers of both vehicles were declared deceased on scene and no other passengers were in either vehicle. The drivers both had to be extricated from each vehicle due to the excessive amount of front end damage to both trucks." (Source: Town of Oro Valley Town Manager Executive Report, January 2023)

Take the 2026 General Plan Survey

The Town of Oro Valley invites residents of all ages to participate in a brief survey to identify the best ways to engage the community as the Town prepares for the next General Plan, which will be on the ballot in 2026. The survey, which is open now through January 26, can be taken by multiple members of the household.

Chamber Business Summit is January 26

The Greater Oro Valley Chamber of Commerce is hosting a "Business Summit" On January 26 at the Westward Look Resort & Spa.  Registration starts are 8am with sessions beginning at 9am and ending at 2:00 p.m.. Tickets are  $50. There will be breakout sessions on Financial Sustainability, Vision Boarding, Marketing, and Leadership. "Not only will Oro Valley Mayor Joe Winfield address the group at a delicious luncheon on the Sonoran Rooftop Terrace, but you’ll also hear from keynote speaker retired Major General Ted Maxwell of the Southern Arizona Leadership Council. It’ll be a great day for business owners, managers, and front-line staff. All of this for only $50, and that includes a 3-course lunch!" (Source)

LaPosada at Pusch Ridge is back

You may have noticed that construction activity is back for LaPosada at Pusch Ridge. It is located behind Home Depot. La Posada at Pusch Ridge. "The former Nakoma Sky development has re-broken ground as the La Posada at Pusch Ridge development located at Lambert Lane and First Avenue. Previous activities as part of the Nakoma Sky development included the Cañada Del Oro Wash soil cement bank protection, Federal Emergency Management Agency Letter of Map Revision and general site grading. The current activities for the La Posada at Pusch Ridge development include cutting in access roadways, setting up stormwater pollution prevention best management practice elements, and site mobilization. " (Source: Town of Oro Valley Town Manager Executive Report, January 2023) 

Tonight, Council Will Consider (Once Again) How to Spend $5.4 million in ARPA Funds

Previously rejected using the funds to extend reclaimed water system

Tonight, the Oro Valley Town Council will once again consider obligating $5.4 million in restricted American Rescue and Recovery Act Funds ("ARPA").  The council discussed this in December, rejecting an opportunity to obligate these funds for extending the reclaimed water system.

Restricted use funds

These funds can only be used for any of the following three qualified uses: Responding to the Public Health and Economic Impacts of COVID-19; Premium Pay; and Water, Sewer & Broadband Infrastructure. 

Town staff has identified four broad capital improvement project areas where the funds could be obligated

These four areas are shown in the panel right. They include projects identified in the town's current 10 year capital improvement program.

Tourism

The primary focus of the tourism projects is the refurbishment of Steam Pump Ranch. Projects include renovating the Proctor-Leiber House ($1.5m);building a new northern entry by panhandle stables/event space( $1.5m) and repairing the Tack building ($550k). Staff also suggests that the funds could be used to fund restoring Westward Look Drive. These improvements were agreed upon when the town annexed the area.

Stormwater

The funds could be used to pay for Sierra Wash improvements.

Water

There are six water projects. All of these relate to either obtaining or distributing water

Wastewater

Using the ARPA money to extend the reclaimed water system is still a viable option. Use of the funds for that purpose was rejected by the council majority for four reasons: 

• The cost of extending the system will most certainly exceed the $5.4 available. Still, the APRA funds will be a substantial contribution to the total cost. Town staff will provide that estimate in June
• The town might treat the reclaimed water and add it to the town's water supply
• Maybe more water will be available one day from desalinization
• The town might not be able to spend all of the $5.4 million before the spending deadline if this project is chosen

There is no urgent need to obligate the funds now

The funds must also be obligated to a specific use by the end of calendar year 2024. The funds must be spent by the end of calendar 2026. Thus, there is still time to make a decision on how to use these funds.

- - -

Town Council Needs To Designate Use of $10.75 Million Windfall

$10.75 million of remaining ARPA funds yet to be designated for use

The Town of Oro Valley has $10.75 million in federal ARPA funds to designate for use. The town received these funds last fiscal year. The town has until the end of 2024 to assign these funds, obligate them to specific projects. The town must spend these funds by the end of calendar 2026.

The town received a total of $15.4 million of ARPA funds

This is truly a windfall. The town didn’t need this money. The Town of Oro Valley thrived financially during the pandemic. Many communities like Oro Valley are struggling to figure out how to spend all of the ARPA funds by the 2026 deadline.  The panel [below right] shows the total funds received and how they have been used to date.

The use of  $10 million of these fund is mostly unrestricted,  It can be used for replacing town revenues lost during the pandemic

$10 million of these funds can be used on a broader basis to replace “revenue losses” caused by the pandemic. This money can be spent on a broad range of general government expenses. For example, some communities are spending the money on what one would call welfare payments. Others are using it to replace shortfalls in capital spending.

Town staff designated $4.65 million of these unrestricted funds to pay for replacing the town's El Conquistador and Canada Golf Courses' Irrigation

The total cost of the irrigation replacement on the town's two 18-hole golf courses is estimated to be $9.15 million.  $4.5 million of this is being paid for from the $25million Parks Bond; the rest, $4.65 million, from the ARPA funds. 

Town Council did not approve, by resolution, the use of the ARPA funds for that purpose

Nor has the Town Council designated the use of the remaining $5.35 million of unrestricted funds. 

According to town staff, these funds are sitting in the capital improvement fund, waiting to be used to fund future capital projects.  Town staff, without a formal council resolution, used $4.65 million to pay for golf course irrigation replacement.

The use of  $5.4 million in ARPA in funds is restricted

These funds can be used to improve drinking water and wastewater infrastructure.

It is the town council’s job to obligate all ARPA funds. They have not done so.
The town budget does not define the specific use of these funds. Thus, the town council must decide this.  It is then the responsibility of the town staff to spend it as directed. 

Until the town Council meeting of December 7, this council has not focused on fulfilling their responsibility. Thus, Council Member Tim Bohen, prior to and at that meeting, requested that staff to respond to eight questions that he asked regarding these funds. Town staff responded.

None of the restricted funds have been obligated by the Council    

Town Council has not directed staff on how to spend the $5.4 million in restricted funds. LOVE has advocated that the town use theses funds to extend the reclaim water system to the south part of town, thus saving millions of acre feet of drinking water from being used on town parks. The town council rejected this at the last meeting, preferring to wait for the answers to the eight questions asked by Bohen. The answers given by staff don't tell the council how to spend these funds; but their response did clarify one thing.

Town Outside accountant confirms that restricted funds can’t be laundered through the water utility... so that they could be used for another purpose
The Town Council has been terribly misinformed regarding the use of the unrestricted funds for water. Town staff, under the leadership of former town manager Mary Jacobs, current town finance director David Gephart and with some misinformation provided by the town’s independent auditor, suggested laundering these funds through the water utility so that the town can use the funds for non approved purposes. The scheme was to lend money to the water utility, have the utility use it for an intended purpose and then to pay the loan back to the town. Then, the town could use the funds paid back for a non approved use. This is called money laundering. It is illegal. It is chicanery.

As it turns out, LOVE was correct when we identified this as a laundering scheme when Jacobs proposed it to Council in September. In one of the responses to Bohen’s request, the independent accountant recognized that the funds must always be used for the intended purpose, even if they are paid back. The independent accountant concluded this after consulting with a third party organization with which they have recently become affiliated. Frankly, we question the competence of the independent accountant.

Big question still remains: How to spend $10.75 million in remaining ARPA funds?

The clock is ticking. At some point, the council will have to obligate these funds or return them to the federal government.

Town Manager Jacobs Resigns After Proposing "Laundering" ARPA Funds

Jacobs resigns

Town Manager Mary Jacobs resigned Friday. We do not know the reasons behind this. We do know that she proposed a money laundering scheme regarding $5.38million in ARPA funds. This happened at the Town Council meeting last Wednesday. You can read about this scheme in this article.

We do know that council conducted her annual review as scheduled after she had proposed this scheme. 

- - -

Jacobs proposed laundering ARPA funds 
Jacobs and her staff tried to “pull a fast one”. She put an item, Consent Agenda, item 2, on last week’s council meeting, which was an item that clearly needed discussion. Consent Agenda items are not discussed at the meeting unless a council member requests that the item be pulled for discussion. Otherwise, Consent Agenda items are voted on as a block.

The item called for the council to approve a loan of  $5.38 million from the General Fund to the Water Utility Fund.  These funds were received from the federal government as part of the ARPA award. ARPA required that the funds be used for water infrastructure projects. Under Jacobs’ scheme, the utility would pay back this money with interest over time. 

Rather than simply gifting the money from the town to the Water Utility to build infrastructure, Jacobs wanted to lend the money to the Water Utility so that the town can get it back and use it for another purpose, one not related to the federal allowable use of these funds.

As council member Steve Solomon pointed out at the council meeting, the scheme sounds like the town is trying to get around federal regulations for the use of the money because the town will get the money back and then use it for some other, non ARPA allowable purpose.

Solomon was exactly right.  

The Water Utility was the conduit for the sham transaction

Speaking in defense of the loan arrangement, Town Manager Mary Jacobs said that the money that the utility will be getting would be the ARPA funds which carry the restriction that be used for water infrastructure.  According to Jacobs, the money the town will get back in loan repayment and interest would be unrestricted. It will not get back ARPA funds. The funds would be from the general revenues of the Water Utility.

Attention all.

This is called “money laundering”.

Gephart: It's OK to do this because the Water Utility is an enterprise fund

Town Finance Director David Gephart justified the scheme because he felt that the town should not simply transfer the money to the utility.  Gephart said that the reason that a loan has been proposed is because the Water Utility is supposed to be a self sustaining (“An Enterprise Fund”) entity. Thus, anything that has to do with the Water Utility, including administrative services that are provided by the town must be paid by the utility.

The loan approach, according to Gephart, provides the appearance that the Water Utility is self-supporting. Gephart also explained that the town had no alternative but to use this money for the Water Utility system. That’s because any other allowable uses were just not feasible for the town.

So, why not just gift the money to the Water Utility Fund and be done with it? After all, these ARPA monies were gifted to the town by the federal government  The funds are intended to be used for water infrastructure projects.  In this case, the town’s general fund is merely a conduit to get the money to the town-owned Water Utility Fund because the Water Utility did not get the funds get directly from the federal government.

Jacobs tried to do this "in the dark of night" by putting the item on the “Consent Agenda” segment of the town council meeting

Jacobs claimed at the meeting that she wrote about this loan transaction in April. Council Member Bohen agreed that he found it buried in a document council received back then. The members never discussed it then because they were never really aware of it.

It would not have been discussed last week had it not been for the sharp eyes of Bohen, Jones-Ivey and Solomon. The former two asked for the item to be pulled from the Consent Agenda for discussion. Solomon identified the transaction for the “sham” that it is.

Former Town Manager Jacobs tried to put "one past them." 

Fortunately, she failed.

- - -

Federal ARPA Funds Could Help Fund Golf Irrigation Replacement

Town council to discuss options for replacing irrigation of two municipal golf courses tonight
Tomorrow night, the Oro Valley Town Council will discuss replacing the irrigation on the town’s two 18-hole golf courses. According to the town, both courses need the irrigation replaced. The irrigation of both courses is from 31 to 40 years old. This is beyond the expected life of irrigation according to the American Society of Golf Course Architects.

Irrigation systems showing their age
Indeed, according to town staff, the irrigation system of both courses is showing its age: “Over the past five years, the Conquistador and Cañada courses have experienced a combined 175 main line breaks. These breaks have occurred on nearly every hole and vary in severity and impact. During this timeframe over $200,000 has been spent on irrigation repair. It is estimated over 5 million gallons of water have been lost due to these irrigation breaks.”

Bid for irrigation replacement for both courses total $7.8 million

Wadsworth Golf Construction Company is the low bidder for replacing the irrigation The bid is $7.8 million. That bid is well above what was anticipated when the town acquired the courses from HSL Properties (link) in 2015.

ARPA and Parks and Recreation Bond funds could be funding sources
“The Town is in a strong financial position and can currently afford to absorb the additional cost beyond the original budget using American Rescue Plan Act (ARPA) revenue replacement funds, which are unrestricted as to their use.”

According to staff calculations, $4.6 million of ARPA funds qualify as revenue replacement. Per town council direction in July, an estimated $4.5 million of the $25 million Parks and Recreation bond was planned for use towards the irrigation system replacement.”

Staff presenting three options

Staff is presenting three options for the council to consider this evening:

• Full Irrigation Replacement
  The town use $3.3 million of ARPA Funds to supplement the July designated parks and recreation bond money if the council wants to move forward with a complete replacement of the irrigation on both courses.
• Complete Canada Course only
  The Cañada course has experienced 20 percent more main line breaks than the Conquistador course over the last five years. Fully replacing Cañada’s irrigation system would be a form of triage that addresses the system with the most failures. The estimated cost of this option is $3.95 million.
• Partial Irrigation System Replacement to Mitigate Catastrophic Loss Including Main line Section Running Underneath Major Roadways
  This option involves replacing various portions and equipment on both courses at a cost ranging from $3 to $8 million.

- - -